You’ve worked hard, you’ve saved up and now you’re finally in the position to be able to buy your first car. While it’s an exciting time, it can also be complex. When shopping for a car, it’s important to avoid some common pitfalls if you are to get the best deal. You want to land the right vehicle at the best possible price. From negotiation to financing, you can avoid common car dealer traps and save thousands by simply doing your research before buying on impulse. Remember to sell us your old junk car before you buy a new car.
Don’t let your excitement of buying a new car lead to buyer’s remorse. Make sure you get the best deal on a new car by avoiding the following mistakes:
1. Not Doing Your Research
Walking into a car dealership without a plan is sure to leave you vulnerable to making a costly mistake. A car purchase should never be an impulse buy. Buying a new car requires research beforehand. Decide on what you’re after before you hit any dealership.
This includes the car make and model, the price range of your chosen vehicle, whether you want to buy a new or used car, and how much money you can put down. Research and compare car loans if you are looking to purchase your first car with a personal loan. The competitive nature of the car loan market in Australia means you have the chance to find a better rate which can save you thousands in interest and fees.
2. Not Having A Budget
One of the first things a car dealer will ask you is “what’s your budget?”. You don’t have to disclose this to them, but if you do, you are leaving yourself vulnerable to spending your entire allocated amount when you could have gotten the same car for less.
Therefore, it’s important to determine your budget before going into any dealership. Unless you can buy a car outright, you have to know how much you can realistically and comfortably afford in repayments as well as other associated costs such as stamp duty, dealer delivery, insurance, registration, and extras.
3. Going For ‘Flashy’ Rather Than Functional
It may be tempting, but you should avoid buying a car based on looks. Your first car should be based on your needs and the function you need it to serve. You shouldn’t be looking at sports cars when you’re in need of a family vehicle, for example. By understanding your needs first, you reduce the risk of making an expensive impulse purchase.
4. Focusing Only On The Monthly Payment When Negotiating
One common mistake people make when looking for their first car is thinking about the monthly payments they’ll have to make. While a lower monthly payment is good for your budget, a longer payment period means you can pay back more money overall.
If you started with a plan that includes the maximum price you can pay for a vehicle based on your budget, it’s best to commit to something you can afford rather than not afford. Problems arise when a buyer wants more vehicles than they can afford, ending up in a long-term monthly repayment schedule which ends up in higher interest fees which can end up costing them more than the vehicle is worth.
5. Letting The Dealership Run A Credit Check
If you’re going to finance your first car with a loan, the dealer will have to eventually run a credit check. It’s important not to agree to this before you are well on your way to completing the deal. By allowing the dealer to run a credit check, it can negatively affect your credit rating which can make it harder to get a loan in the future. Therefore, it’s wise to refrain from having a credit check done if you’re a long way from buying.
6. Foregoing The Test Drive
Once you’ve narrowed down your choice to a select model and make, you should arrange a test drive. If you don’t test the vehicle before purchasing, you run the risk of being out of pocket for a vehicle you don’t enjoy or that fails to live up the ‘hype’.
A lot of cars look good on paper, but just like choosing the right phone or computer, you need to be sure that it’s the right fit for you. It’s critical that you arrange a 30-minute test drive of the vehicles you’re considering and perform a thorough walk-through of all the vehicle features before committing to purchase.
Before buying your first car, it’s important to be clear with what you want and realistic with how much you can afford. While the excitement of a first car purchase is understandable, try not to let your emotions cause you to buy on impulse.
Like any major purchase, buying a car is an investment and can either work for you or against you in the long run. Choose wisely by looking for vehicles that fit your purpose and needs and that are within the best possible price range for your budget. The goal is to open your eyes to the true costs of owning a car and avoiding any traps that may have you spending more than you can afford.